Stock Report

DMCC Speciality Chemicals Ltd reports resilient performance in Q3 FY24

Posted On : 2024-02-09 23:16:23( TIMEZONE : IST )

DMCC Speciality Chemicals Limited, India's leading Sulphur chemistry solutions manufacturer reported its financial performance for Q3FY24.

Key Financial Highlights:

Revenue from Operations: DMCC Speciality Chemicals Ltd reported revenue from operations of ₹80.53 crores in Q3 FY24, marking a modest quarter-on-quarter (QoQ) growth of 5.23% and a commendable year-on-year (YoY) growth of 11.78%. However, on a cumulative basis for the nine months of FY24, revenue witnessed a decline of 16.37% compared to the same period last year, amounting to ₹242.64 crores.

Total Income: The total income for Q3 FY24 stood at ₹81.24 crores, with a QoQ growth of 4.98% and a YoY growth of 11.33%. Similar to revenue, the total income for the nine months of FY24 saw a decline of 16.13% compared to the corresponding period last year, amounting to ₹245.15 crores.

EBITDA and Margins: DMCC Speciality Chemicals Ltd reported an EBITDA (including other income) of ₹7.81 crores in Q3 FY24, reflecting a significant YoY growth of 266.95%. However, on a QoQ basis, there was a decline of 24.60%. The EBITDA margins stood at 9.61% in Q3 FY24, compared to 2.92% in Q3 FY23, indicating a substantial improvement.

Profitability: The company reported a profit after taxes (PAT) of ₹0.31 crores in Q3 FY24, reflecting a significant YoY improvement from a loss of ₹3.16 crores in Q3 FY23. However, on a QoQ basis, there was a decline of 87.04%. The cumulative PAT for the nine months of FY24 stood at ₹5.82 crores, representing a significant increase of 2363.19% compared to the same period last year.

COMMENTING ON THE Q3FY24 PERFORMANCE, Bimal Goculdas, Managing Director and CEO, said,

During Q3FY24, DMCC faced a challenging operating environment that continued to impact the broader chemical industry. The quarter was marked by a subdued financial performance, primarily attributable to the compression of gross margins. This compression was largely a result of an unfavourable product mix that emerged during the quarter.

In the bulk chemicals segment, we experienced high volumes, which, while contributing to the top line, came with relatively lower margins. Conversely, the speciality chemicals segment, particularly in export markets, saw a reduction in volume off-take compared to previous quarters. Notably, the months of November and December witnessed unusually low volumes in speciality chemical exports, a trend that persisted into January. Among the end user industries, the agrochemical sector faced significant challenges, leading to decreased demand for our products. On a brighter side, the pigments segment showed signs of slight improvement.

Despite these challenges, we continued to focus on innovation and product development, ensuring we remain at the forefront of the industry even during downturns. A significant achievement in this quarter was the debottlenecking of our Boron production capacity. This strategic expansion has successfully increased our Boron capacity by 30-35%. Towards the quarter's end, we observed promising traction in the Boron segment, fuelling our optimism for increased volumes in the subsequent quarters. We are confident that FY25 will mark an upturn for our Boron business.

In line with our commitment to sustainability and responsible operations, we have initiated the implementation of the Responsible Care program at our Dahej site. This initiative is expected to be completed in the coming months, further strengthening our dedication to environmental stewardship and safety.

Despite the headwinds faced in Q3FY24, leading to an impact on our financial performance, we remain positive about the future. Our team's resilience and the strategic initiatives underway, including capacity expansions and product innovations, position us well for a rebound. As the demand environment normalises, DMCC is poised to leverage its enhanced capacities and diversified product portfolio to drive improved financial performance.

Shares of DMCC Speciality Chemicals Limited was last trading in BSE at Rs. 310.20 as compared to the previous close of Rs. 322.00. The total number of shares traded during the day was 6197 in over 470 trades.

The stock hit an intraday high of Rs. 323.10 and intraday low of 301.50. The net turnover during the day was Rs. 1941988.00.